US pork exports to China to jump higher
The ASF situation in China and some other Asian countries is going to have an impact on the global meat market for a long time, according to an analysis presented by Derrell Peel from Oklahoma State University. "Pork production in China is projected to decrease 14% in 2019 from 2018 levels, with another 25.3% drop year over year in 2020. That implies a 35.7% decrease in Chinese pork production in two years. This contributes to a 15.7% decrease in global pork production from 2018 to 2020. The losses in China may well exceed these estimates," said Mr. Peel in an article published by AgWeb magazine.
The situation creates a major protein deficit in China which is expected to have an impact on all protein markets globally. "Total Chinese consumption of pork, poultry and beef is projected to decrease by 14.9 percent from 2018 to 2020; with pork dropping to a 59.8 percent share of total meat consumption," according to the analysis.
However, China's pork imports are going to grow abruptly as the gap in the market is expected to go wider. Analysts are foreseeing an increase of 66.6% in 2019 over 2018 and another 34.6% year over year in 2020. The first signs of increased demand for pork were seen in July and August, when, despite the tariffs applied for US pork, American exporters have seen an increase of 479% in pork exports in the Chinese market. Still, that may represent only the tip of the iceberg, according to Jim Long, President – CEO, Genesus Inc. "We spent some time last week with a company from China. They have about 60,000 sows currently. Last week they said they were selling market hogs for 43 RMB/kg., which is $2.75 lb. live weight. We asked them how high they thought market hog prices could go, they replied, 60 RMB/kg., which is $3.84 lb. live weight. If that happens a 260 lb (120 kg.) hog would fetch $988. Hard to believe, but then again no one thought the price would get where it is now. No doubt you can see why JBS and Tyson decided to pull Ractopamine from feed the last two weeks so they could ship to China. Over the next few months total pork exports from the US will set unprecedented volume levels filling the hole cracked by ASF in China, South Korea, Vietnam and the Philippines," he said in the latest Genesus market report.
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